School District Surviving by Deferring Bills, Purchases : Education: Officials hope they can keep up the fiscal balancing act until the end of the school year, even without an immediate state loan.

An ongoing financial crisis has forced school administrators to stop buying supplies and to leave bills unpaid, but so far the Compton Unified School District has stayed in business, defying predictions that it would have to close in May.

Thanks to austerity measures, a business office reorganization and other strategies, officials said they now are hopeful the school system can complete the academic year even without an anticipated emergency state loan.

“We haven’t hit a real hardship yet,” district controller Theresa Morrison-Givens said. “We are committed to restoring ourselves to solvency.”

On Friday, the district faces its next acid test, a $5.2-million teachers payroll. Administrators said they might not be able to meet the payroll without the state loan. At the same time, they are taking other steps to stay solvent.

Late last week, Compton school officials were trying to pry a $1.7-million advance from the state in funding for programs to benefit disadvantaged students. The district is entitled to the money, but the funds normally arrive at the end of the month.

Administrators asked the state to transfer the money immediately in hopes of getting past the mid-month crisis. The district worked a similar deal in April to overcome a cash shortage.

The district also has curtailed spending from its $90.3-million budget. At its former pace, the district was expected to end both May and June more than $4 million in the red, according to analysts from the Los Angeles County Office of Eduction. At the time, analysts considered their estimates to be conservative.

The district slowed spending by establishing a “freeze committee” of senior administrators. In May, the district cut payments for supplies and services to $175,000. In earlier months, such payments had sometimes exceeded $1.5 million.

“Any purchase requisitions have to go through the freeze committee . . . from 20 cents on up,” Morrison-Givens said.

“We have to learn to live within our means,” she said.

The standard answer to a funding request has been either “no” or “later.” That applied even to employees seeking reimbursement for money spent on district business trips.

The exceptions have included employee salaries, utility bills, food purchases for the cafeteria and expenses related to student safety.

The district also has stopped paying many bills.

“There are some distraught and disgruntled vendors,” Morrison-Givens said. “They are going to get 100% of their money.”

The unpaid vendors include Ron Huggins, a district sales manager for Xerox.

“We and other creditors have received official notice of the situation,” said Huggins, whose company sells and maintains district photocopiers. “We understand the situation down there. These are tough times.”

Huggins did not want to discuss how much money the district owes Xerox. He said he didn’t want to encourage other creditors to postpone paying their bills. But district officials conceded that the tab is probably more than $200,000.

Financial problems for the school district ripple out to the community. The school district, with about 3,300 employees, is by far Compton’s largest employer. In addition, Compton Unified has a policy of buying from local businesses when possible.

“Much of the impact is being felt by the local community,” Assistant Supt. Elisa Sanchez said of the unpaid bills. “It’s a serious blow to our local economy.”

In some cases, administrators have asked banks to extend short-term credit to struggling vendors waiting to get paid, officials said.

The G .L. Porter Construction Co. hasn’t asked for such help, but owners Glen and Mary Porter would like their money. The district agreed to pay the Compton company $58,000 to install a portable classroom at Rosecrans Elementary School. The work is about two-thirds complete, but the Porters have yet to receive a dime.

They are getting by on pay from other jobs.

Compton contractor David Briggs said he turned down other projects to participate in about $10 million worth of work on renovation projects at schools throughout the district. These projects are mostly state funded, but cannot go forward without partial district funding.

“It has been a major problem,” said Briggs, who owns Benji Construction.

The district had hoped to complete some renovation work by next fall. That date may now be unrealistic, Briggs said. “We’re just waiting to see if the money comes through,” he added.

Some suppliers have become edgy. One contractor arrived at Centennial High with wood to repair bleachers for graduation exercises. When administrators were not prepared to pay him on the spot, he gathered his lumber and left.

Officials ultimately coaxed him back in time to make the repairs.

The successful budget-juggling has not diminished the school district’s need for a loan, Acting Supt. Harold Cebrun said. And the district still needs the money as soon as possible.

“If we had been paying our debts, we couldn’t make payroll,” Cebrun said.

Estimates on the size of the loan needed vary widely, with some approaching $20 million. That uncertainty has caused part of the delay in getting a loan bill through the state Legislature. Lawmakers said they want to keep schools open without offering a financial windfall to Compton Unified.

Independent auditors hope to have a solid picture of the school system’s financial needs by the middle of next week, district officials said.

The size of the loan is significant. If the district must borrow more than $7.4 million, state law requires a takeover of the Compton school system until the money is repaid.

Disagreement among legislators over which agency would supervise the school district also has slowed passage of loan legislation. Lawmakers are now leaning toward letting the state Department of Education appoint a trustee for the school system, Acting Supt. Cebrun said.

Some Republican Assembly members had wanted the county education office to manage the district.